The damage caused by the Covid-19 pandemic to the businesses of some of Israel's most prominent business magnates is evident in the half-yearly revision of the Tel Aviv Stock Exchange's (TASE) indices.
Declines of more than 50% in the past few months in the share prices of some of the stocks that make up the most prestigious TASE index, the Tel Aviv 35, has led to their ejection from the index list. Holding companies controlled by Yitzhak Tshuva, David Fattal, Chaim Katzman and Idan Ofer have been relegated from it.
The revised index lists published by the TASE at the end of last week show that among the companies exiting the leading index are Delek Group Ltd. (TASE: DLEKG), whose share price has plummeted 85% since the beginning of this year; hotels company Fattal Holdings, with a fall of just over 70%; and Oil Refineries and its parent company Israel Corporation, Delek Drilling, controlled by Delek Group, and real estate company Gazit-Globe - all with declines so far this year of 55-60%.
The steep falls in these stocks was partly because of the difficulties in the industries in which they operate, as a result of the pandemic, but the effect was amplified by the high levels of leverage in most of the companies. The declines in their share prices hurt the performance of the Tel Aviv 35 Index relative to leading stock indices overseas. The Tel Aviv 35 Index is down by about 18% for the year to date, whereas the S&P 500 index in the US, for example, is almost unchanged over the period.
Some of the companies that will replace the ones being relegated will appear on the Tel Aviv 35 Index list for the first time, and the TASE describes all six of them as belonging to the various technology sectors: cleantech, life sciences, information technology, electronics, optics, and semiconductors. One of them is green energy company Energix, which has born aloft by the accelerating move to renewable energy sources, rising 35% since the beginning of the year, to give it a market cap of NIS 6.5 billion.
Other stocks that have been proof against the Covid-19 crisis and found their way onto the Tel Avi 35 list are Maytronics, which produces robots for cleaning swimming pools, and whose share price has risen 70% so far this year; and computing services company Matrix, whose share price has risen 20% since the start of the year. Both companies now have market caps over NIS 5 billion.
Other stocks that have risen by about 30% so far this year and are joining the Tel Aviv 35 Index list are dual-listed stocks Nova Measuring Instruments and Sapiens. Far outstripping them is biotech company Opko Health, which returns to the main index after a 265% rise in its share price for the year to date, mainly thanks to its development of Covid-19 tests, bringing it to a market cap of NIS 12.5 billion.
The strength of technology stocks on the TASE is also manifest in the performance of three technology indices (TA Global BlueTech, TA Tech Elite, and TA Technology), which have jumped by 23-33% so far this year.
On the negative side, among the companies departing the leading TASE indices as a result of the effect of Covid-19 are tourism company Issta, Bet Shemesh Engines, which makes aero-engine parts; and non-bank credit company Nawi Brothers. The three stocks have declined by 45-55% since the beginning of the year, leading to their relegation from the Tel Aviv 125 Index.
Moving in the opposite direction are energy storage company Augwind, the star of the TASE this year with a rise of 970%, and Electreon, which is developing under-road technology for charging electric vehicles as they drive, and has risen by more than 200% for the year to date. They are among the most outstanding companies joining the Tel Aviv 125 Index, alongside several older-established companies such as real estate company Africa Israel Residences.
Among newcomers to the TASE are G. Willi-Food International, which started to be traded on the TASE a month ago (and is also traded in the US), and which will join the SME 60 list, and Doral Energy, which made its IPO last month, and which will join the Tel Aviv 90 list.
The revision to the TASE indices comes into effect on August 9.
Published by Globes, Israel business news - en.globes.co.il - on July 27, 2020
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